Holistic budgeting: a process: a whole system approach

Information Outlook, August, 2003 by D'Llle Asantewa

"HOLISTIC \H_-'LIS-TIK\ ADJ (1926) 2: RELATING TO OR CONCERNED WITH WHOLES OR WITH COMPLETE SYSTEMS RATHER THAN WITH THE ANALYSIS OF, TREATMENT OF, OR DISSECTION INTO PARTS." (MERRIAM-WEBSTER'S COLLEGIATE DICTIONARY)

Specialized libraries are usually embedded in and supported by a diverse group of parent organizations: federal, state, and local governments; corporations; academic institutions; and associations or other non-profit organizations. Because so many organizations are represented in the specialized library field, budget formats vary widely, but most libraries prepare one every year.

Articles on the technical aspects of budgeting can be found in SLA's Information Outlook and other library publications. This article will examine the theory and reality supporting holistic organizations, their libraries, and their budgeting practices. Program budgeting has a closer affinity to holistic practices than do line item or performance budgets, and it is the program budgeting perspective from which this article is written.

Budgets are called by various terms: operating plan, planning tool, policy tool, medium of communication, and means of control, to name a few. What budgets do is allocate limited financial resources to competing organizational units. Many budgets also set standards against which actual performance is compared, thus revealing how effectively objectives are being met.

The following are some functions that budgets serve:

Communication tool. A budget communicates to staff the reality of available resources--human, technological, and financial. It also communicates the objectives that staff helped develop and committed to meet.

Planning tool. A bottom-up approach to planning is organizational learning in action. This is where staff buy into the planning and budget process and commit to working toward the fruition of their efforts and talents.

Contract. This is a binding agreement between senior management and the rest of the organization, a promise to allocate a determined amount of money to the library for agreed-upon objectives (Urban Institute and Metropolitan Research Institute, n.d., p. 5).

Major policy tool. How you, as a decisionmaker, spend your organization's limited resources is "perhaps the most important policy decision you will make during a fiscal year" (Urban Institute and Metropolitan Research Institute, n.d., p. 6).

The Holistic Approach

Holistic preparation of a budget focuses on the many aspects of the environment (see below) and of the library itself that will be affected. Holistic budgeting not only brings different parts of the library together, it concentrates on the interactions among those parts. The holistic approach is about organizational archetypes behind an event rather than about the event itself; about contradictions and inconsistencies and schisms and divergences rather than just trying to fix a situation; and about depending on principles of leadership in addition to theory and accepted social truths (McNamara, accessed June 13, 2003).

The holistic approach to budgeting is to engage people in the process from all parts of the system: library support staff, who may have a broad knowledge of operations but feel left out; end users, for their input and support for your purchasing decisions; your finance department, so they can learn what you need; reference staff, who may feel frustrated because important information sources are not on hand; technical services staff, who often need systems upgrades to process materials more efficiently; and vendors, so you can negotiate for discounts and multiple format purchases (Seer 2000, pp. 190-192).

A holistic approach to budgeting involves the entire organizational system. This leads us to consider concepts popularly known as internal and external environments. If we think of internal as the library itself, external would be the parent organization outside the library department. Further away, but still in the external environment, would be forces such as legislation, the economy, technological change, and competition, which affect both the parent organization and the library. Using this model, major problems that affect libraries can come from the external environment as well as from the library itself.

Chilean scientists Humberto R. Maturana and Francisco J. Varela argued that organizations' environments are not defined as internal and external; rather, everything that contributes to an organizational system's detriment or to its functioning is part of its environment, and all interactions affect the environment as a whole (Morgan 1986, pp. 236-247). Applying this model, the system would include vendors and suppliers, legislation, technology, and economic conditions. In many geographic locations, even the weather would be a recognized force. Libraries that subscribe to this model would be alert not only to the effects that the environment has on them, but how they in turn affect the environment. These libraries, rather than being reactive, would proactively facilitate change to the broader systems in which they operate.